THE STRATEGY AND TACTICS OF PRICING

Journal of Product & Brand Management, 2011

Handbook of Pricing Research in Marketing, 2009

This chapter organizes and reviews the literature on new product pricing, with a primary focus on normative models that take a dynamic perspective. Such a perspective is essential in the new product context, given the underlying demand-and supply-side dynamics and the need to take a long-term, strategic, view in setting pricing policy. Along with these dynamics, the high levels of uncertainty (for fi rms and customers alike) make the strategic new product pricing decision particularly complex and challenging. Our review of normative models yields key implications that provide (i) theoretical insights into the drivers of dynamic pricing policy for new products and services, and (ii) directional guidance for new product pricing decisions in practice. However, as abstractions of reality, these normative models are limited as practical tools for new product pricing. On the other hand, the new product pricing tools available are primarily helpful for setting specifi c (myopic) prices rather than a dynamic long-term pricing policy. Our review and discussion suggest several areas that offer opportunities for future research. * Comments and suggestions from Vithala R. Rao, Jehoshua Eliashberg and an anonymous reviewer are gratefully acknowledged. 1 Noble and Gruca's study is not limited to new products. They organize the strategies by the pricing situation for both new and mature products and then, for strategies within each pricing situation, by the conditions expected to favor the choice of a particular strategy. The three new product strategies were chosen by 32 percent of all respondents across all situations (skimming 14 percent, penetration 9 percent, and experience curve pricing 11 percent).

2018

The current paper reviews various pricing strategies adopted by the modern businesses. It further states various merits and demerits of each of the pricing strategies. The main objective of the paper is to compile some of the popular pricing strategies and their pros and cons at one place. The topic not only relates to marketing management but also extends to managerial economics. The paper has been classified into six parts. The first section introduces the purpose of the paper. The second section examines the importance of the pricing strategies. The third section describes the main objectives behind pricing strategies. The fourth section explains various pricing strategies whereas the next section discusses advantages and disadvantages of various pricing strategies. The paper ends with a conclusion about how the businesses should select the most suitable pricing strategy for themselves.

Pricing strategy includes making choices of specific prices and price discount policies for specific products and customers in specific time periods and purchase/competitive situations; a pricing strategy is related to fulfilling multiple objectives, including profit, sales, market share, and customer trial and/or retention. This paper includes an examination of two key issues on price decisions: (1) how should price decisions be made (the normative issue), and (2) how are price decisions actually made (the ecological issue). Implications for improving pricing decisions are included in the discussions of both normative and ecological issues. The paper closes with some observations useful for applied research and strategies for making better pricing decisions.

National Public …, 2001

A small change in prices can have a significant impact on profits and it is therefore becoming crucial for firms to use innovative approaches to pricing. Smart pricing is a dynamic approach to pricing that requires that firms have accurate information about market demand and ...

2017 Annual Meeting, July 30-August 1, Chicago, Illinois, 2017

Applied economists have been trying to sell businesses on the value of demand-based pricing for many years. Their arguments favoring demand-based pricing have not been particularly persuasive and cost-based pricing continues to be the dominant price-setting method. This paper suggests four changes that may lead more firms to use demand principles when they set prices. Applied economists should acknowledge the benefits of cost-based pricing, shift their focus from profit-optimization to profit-improvement opportunities, develop principles and methods that better meet firm needs, and add new pricing topics to classroom discussions.

Review of Marketing Research, 2011

How do buyers judge prices? How do they know whether a product or service is priced reasonably, is a good deal or is too expensive? Do buyers perceive all price increases and all price promotions? Do price promotions and price increases necessarily change buyer behavior? How do buyers process the plethora of price information they encounter each day? Economists contend that price primarily represents the monetary sacrifice to obtain a product or service. Behavioral price researchers argue that more complex phenomena are involved. Buyers have individual, internal norms against which they judge prices. There are threshold points below which buyers do not perceive price changes. There are also specific ranges of prices buyers find acceptable for a particular product. Despite over four decades of behavioral price research, we know little about the root causes of these buyer responses to price information. This article is the first of several planned essays that will review the historical, theoretical and empirical developments in the field of behavioral price research. In this first review, we examine the core concepts behind buyer responses to price as well as the complex way that people process numbers. The objective of these essays is to bring focus to, clarify conceptual definitions, examine empirical developments and raise future research questions for this field of study.

2000

Pricing of products and services is a complex task for industrial marketing practitioners. The failure to understand the connection between business strategy and the pricing decision at the level of industrial products and services may lead to lost business opportunities and unsatisfied customers. In this article, the importance of strategic pricing in business relationships is discussed by examining the effects

Journal of Revenue and Pricing Management, 2011

Magnus Johansson holds a PhD from the School of Economics and Management, Lund University and has worked with strategic analysis and planning within the IT, telecom, automotive and general industry.

The issue of pricing as a vital element of the marketing mix variables cannot be ignored when considering factors that boost organizational profitability. It interacts with other marketing mix variables in determining the collective efficacy of the marketing mix. Pricing is a vehicle for driving the effectiveness of other marketing mix variables. The objective of their paper is to determine if effective pricing management serves as catalyst for enhancing organizational profitability, using PZ Cussons Nigeria Plc. The method used is survey approach which gives room for primary data-questionnaire. Aside from the primary source of data, secondary source of data which includes the use of related literature materials, journals that are useful for the successful write up of this paper was adopted. In conclusion, it is an undisputable fact that pricing is a vital element of the marketing mix variables that determines the company's sales volume and profitability. More so, it is a manipulative tool in the hand of organization's influencing consumer decisions. In line with this research, it is hereby recommended that organizations should constantly pay attention to the pricing procedure as well as the reactions of potential buyers. More so, companies should be sensitive to competitors pricing strategies.